Privacy Protection and Technology Diffusion: The Case of Electronic Medical Records
Amalia R. Miller
University of Virginia - Department of Economics
Catherine E. Tucker
Massachusetts Institute of Technology (MIT) - Management Science (MS)
NET Institute Working Paper No. 07-16
This paper quantifies the effect of state privacy regulation on the diffusion of Electronic Medical Records (EMR). EMR allow medical providers to store and exchange patient information using computers rather than paper records. Hospitals may be more likely to adopt EMR if they can reassure patients that their confidentiality is legally protected. Alternatively, privacy protection may inhibit adoption if hospitals cannot benefit from easily exchanging patient information. We find that state privacy regulation restricting hospital release of health information reduces aggregate EMR adoption by hospitals by more than 24%. We present evidence that suggests that this is due to the suppression of network externalities.
Number of Pages in PDF File: 34
Keywords: Technology Diffusion, Privacy Protection, Health-care IT, Network Externalities, Hospitals
JEL Classification: I1, K2, L5, O3
Date posted: January 30, 2007 ; Last revised: October 29, 2014
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